I recently came across a book called “Make Disruption Work, a CEO handbook for digital transformation”. This easy to read and otherwise excellent book was written by Alexandra Jankovich and Tom Voskes.
The main message of the book is that technology will drive disruption and that no sector or industry will be left untouched. This, of course, is no surprise if you read our weekly blogs on this topic.
The model that they have, the 5D model revolves around:
- Discover (the new World)
- Define (how you act)
- Determine (what you need)
- Drive (the change)
- Delight (in the new world)
In this article I will share what I think are the highlights from this book.
The feel of the book is a bit like the Business Model Canvas book by Osterwalder & Pigneur. Not only from the size of the book but also the readability. On the front we find a picture of a frog jumping out of a pot of boiling water. According to legend, a frog will jump out of a pot of boiling water but when the temperature is increased slowly will happily be boiled to death. This is, a myth of course but the example is valuable.
Many of your competitors do not appear overnight. There are some examples where activities are kept under the radar but in many cases the disruption of you market is right under your nose. Airbnb was not some stealth organization that took the major hotel chains by surprise (or at least it should not have been). Snoozing is no longer an option in the business world.
Therefor it is paramount that organizations have a clear overview of their industry with competitors, (potential) partners and external threats in place. Not all industries are impacted equally and with the same speed. Keep in mind that not only the industry advances, also you customers are becoming more tech savvy. Regardless whether you are in a B2B or B2C market.
In this discovery phase, also keep an eye on technologies (AI, IoT etc.) that might have an impact on your business, either from a cost or a revenue perspective). This is tied to the concept of digital Imagination, what can we do with technology that we could not do in the past.
In the chapter Define six rules are introduced. These are:
- End customers are the real assets
- Fat margins get stolen
- Winner takes all
- Digital is a new channel
- People search for needs not for brands
- Customers expect the best (period)
It would go to far to discuss all these rules in the blog (although it is tempting). Let me focus on the two aspects that instantly caught my eye. The Digital is a new channel is of course for the CEO of Yenlo the first thing that I read. Digital is indeed a new channel that can become a major part of your business (or at least a steady part). I do not believe that there is a future without a digital channel (for primary or secondary processes). You need to invest in the channel, in the definition phase you should have a strategy how your channel will evolve, what kind of functionality you will offer and why.
The other rule is about consumers expecting the best. This goes beyond a survey that you send out asking them to rate your service to them. A colleague recently told an example of an online retailer whose online score as far as service goes is a 9.6 (out of 10). They wanted to improve and get a 9.8. I find this both hard to believe as well as a bit nonsensical. First, the number is so high that my skeptical nature finds it a bit too high (remember in school how hard it was to get a 10 on anything?). There is also little room for improvement and perhaps improving that final percentage points does not make any sense at all. It might be better to focus on something else. But, your customer does want good service.
Determining what you need is the next step. That determination is partly who you need as far as talent goes, a drive and purpose as an organization (and the buy in of the employees) and several other things. IF you are interested which ones, I would suggest buying the book. Why am I skipping this part? Because the tech part, as far as I am concerned is more interesting. Technology is not so much a cost factor as it is a growth and profit factor when applied in the right way. A digital strategy will cost you money but should not bankrupt you.
The times that development teams went into a room and emerged half a year later with a product are long gone. Sprints, iteration and agile approaches will improve products and processes. Finally, a very sensible remark, evolve out if the past. Revisit your IT architecture and try and ring fence as much legacy as possible and feasible.
It is time to drive the change. The 5 capabilities that you should focus on are: marketing, IT development, category/product management, logistics and operations and data analytics and business intelligence. It goes without saying that different industries have different needs and mixes of these capabilities. Of course, you do not need to have all the IT skills in house, there are partners who can help you with that. Basically, from the beginning to the end. And let’s not forget that IT needs to be at the table from the beginning, not when all the decisions already have been made.
Digital transformations require leadership. There might be people in the organization whose interests are not aligned with the digital transformation, who fear for their position or who are reluctant to change. It will require significant effort from your digital leader (preferably at C-level) to let people see the change needed and let them buy in. This is not one-way communication, but a conversation. However, in the end your strategy is to road that the organization will travel. Preferably, people will be in, but in some cases, it also requires saying farewell to people who can’t or don’t want be part of the future.
How can you use digital imagination?
I’ve read the book with much interest and shared some of my ideas. If this has inspired you, think about how you can jump out of the water before it becomes too hot.
As IT is a major part of your strategy, read our white paper below. It’s there to help and to guide you to reap the benefits of your digital transformation. Feel free to reach out to me.